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Activity 2 Cfas

The document discusses the three classifications of cash flows in a statement of cash flows: 1) Operating activities include cash from revenues and expenses related to net income such as sales and purchases. 2) Investing activities show cash from investing in long-term assets like property, plant, and equipment as well as securities. 3) Financing activities contain cash from obtaining or repaying debt and equity transactions like issuing stock or paying dividends.

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Eugene Alipio
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199 views2 pages

Activity 2 Cfas

The document discusses the three classifications of cash flows in a statement of cash flows: 1) Operating activities include cash from revenues and expenses related to net income such as sales and purchases. 2) Investing activities show cash from investing in long-term assets like property, plant, and equipment as well as securities. 3) Financing activities contain cash from obtaining or repaying debt and equity transactions like issuing stock or paying dividends.

Uploaded by

Eugene Alipio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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EUGENE D.

ALIPIO 20193479

Answer the following questions/statements in not less than 5 sentences.

1. The statement of cash flows present cash flows according to the following classifications.
Explain each classification.

a. Operating activities- the include cash activities related to net income. For
example, cash generated from the sale of goods (revenue) and cash paid for merchandise
(expense) are operating activities because revenues and expenses are included in net
income.

ANG TATANDAAN LANG SA OPERATING ACTIVITIES AY ANG MGA SUMUSUNOD:

 Current Assets - are all the assets of a company that are expected to be sold or used
as a result of standard business operations over the next year. Current assets include
cash, cash equivalents, accounts receivable, stock inventory, marketable
securities, pre-paid liabilities, and other liquid assets.

 Current Liabilities - Current liabilities are a company's short-term financial


obligations that are due within one year or within a normal operating cycle. Current
Liablities include Accounts payable, Interest payable, Income taxes payable, Bills
payable, Accrued expenses and Short-term loans.

 Under Profit and Loss Statement- is a financial statement that summarizes the
revenues, costs, and expenses incurred during a specified period, usually a fiscal
quarter or year.

b. Investing activities- shows the cash generated or spent relating to investment


activities. Investing activities include purchases of physical assets, investments in securities,
or the sale of securities or assets.

ANG TATANDAAN LANG SA INVESTING ACTIVITIES AY ANG MGA SUMUSUNOD:

 Long term investments- is an account on the asset side of a company's balance


sheet that represents the company's investments, including stocks, bonds, real estate,
and cash. Long-term investments are assets that a company intends to hold for more
than a year.
 Fixed Assets- are noncurrent assets, meaning the assets have a useful life of more
than one year. Fixed assets include property, plant, and equipment (PPE) and are
recorded on the balance sheet
 Non-current Assets- are those that are considered long-term, where their full value
won't be recognized until at least a year.

c. Financing activities- include transactions involving debt, equity, and dividends. Cash
flow from financing activities provides investors with insight into a company's financial strength
and how well a company's capital structure is managed.

ANG TATANDAAN LANG SA FINANCING ACTIVITIES AY ANG MGA SUMUSUNOD:

 Non-current Liabilities- also known as long-term liabilities, are obligations listed on


the balance sheet not due for more than a year. Examples of noncurrent
liabilities include long-term loans and lease obligations, bonds payable and deferred
revenue.
 Stockholder's Equity- also referred to as shareholders' equity, is the remaining
amount of assets available to shareholders after all liabilities have been paid.
Stockholders' equity might include common stock, paid-in capital, retained
earnings and treasury stock.

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